In connection with suicide-ganking and contracts I often hear the term double-wrapping to make it impossible to see the cargo inside the ship. While I have some vague idea on how this is supposed to work, I'm unsure about the details.

What is double-wrapping, how exactly can I do that and when should I use double-wrapping?

To double-wrap something, you need to have an alt or another character who you trust that you can make out a contract to.

The base idea we're exploiting here is that you can't scan a container inside a container with cargo scanners. When you make a courier contract, it puts all items you've attached to the contract in a special container called "plastic wrap". All you need to do is make sure all the items you want transported are already inside a regular container (of a size that you can fit into whatever you're hauling with), and then you make the courier contract and attach that regular container to the contract. The regular container should now be inside the plastic wrap container. Make the courier contract a private one to your alt or trusted friend, they can then accept the contract, receive the plastic wrapped container, and either haul it for you or just regular station trade it back to you if the character isn't on the same account.